Bitcoin mining is a profitable business but now it is more profitable than ever before. Earlier this week the profit for the verification of the transactions hit $52.3M for a day, according to blockchain data and analytics provider Glassnode.
What does it mean for the network?
According to the firm the higher fees are a good thing. The price for one Bitcoin is growing and the price for the transaction is growing as well. The higher fees can attract more new miners into the space. The profit is the main power.
What do miners do?
To transact a Bitcoin you need to transfer it through the Blockchain from your address to another. All of the transactions go to a block of transactions. In order to confirm their authenticity, the block must be approved by the miners. Using powerful computers, they solve cryptographic puzzles which in turn verify transactions on the Bitcoin Blockchain. After the puzzle was solved the transactions are verified and the new transactions go to the next block and will be approved again.
The amount of energy for verification is a widely discussed topic not only by conservationists but also by some governments. According to Cambridge University’s Centre for Alternative Finance the quantity of the electricity that is used by the miners is equal to that one used in London.
Another report says that 76% of the energy that the miners use for the verification of the transactions comes from renewable sources.
The adaptation of many individuals and institutions in the last few months was the reason for the price per coin to go to the roof. In order to verify some of the transactions the new owners were ready to pay even higher fees – by this way the miner prioritized their transactions.